United States Bullion Depository

The United States Bullion Depository

The United States Bullion Depository, often known as Fort Knox, is a fortified vault building located adjacent to Fort Knox, Kentucky, used to store a large portion of United States official gold reserves and occasionally other precious items belonging or entrusted to the federal government.

The United States Bullion Depository holds 4,578 metric tons (5046 tons) of gold bullion (147.2 million oz. troy). This is roughly 2.5% of all the gold ever refined throughout human history. Even so, the depository is second in the United States to the Federal Reserve Bank of New York's underground vault in Manhattan, which holds 5,000 metric tons (5511 tons) of gold bullion (160.8 million oz. troy), some of it in trust for foreign nations, central banks and official international organizations.

History

Seal of the U.S. Mint

In 1933, U.S. President Franklin D. Roosevelt issued Executive Order 6102, which outlawed the private ownership of gold coins, gold bullion, and gold certificates by American citizens, forcing them to sell these to the Federal Reserve. As a result, the value of the gold held by the Federal Reserve increased from $4 billion to $12 billion between 1933 and 1937. This left the federal government with a large gold reserve and no place to store it. In 1936, the U.S. Treasury Department began construction of the United States Bullion Depository at Fort Knox, Kentucky, on land transferred from the military. The Gold Vault was completed in December 1936 for US $560,000, or $8.5 million in 2009 dollars. The site is located on what is now Bullion Boulevard at the intersection of Gold Vault Road.

The first gold shipments were made from January to July 1937. The majority of the United States' gold reserves were gradually shipped to the site, including old bullion and newly made bars made from melted gold coins. Some intact coins were stored. The transfer used 500 rail cars and was sent by registered mail, protected by the U.S. Postal Inspection Service.

During World War II, the repository held the original U.S. Declaration of Independence and U.S. Constitution. It held the reserves of European countries and key documents from Western history; for example, it held the Crown of St. Stephen, part of the Hungarian crown jewels, given to American soldiers to prevent them from falling into Soviet hands. The repository held one of four copies (exemplifications) of the Magna Carta, which had been sent for display at the 1939 New York World's Fair, and which, when war broke out, was kept in America for the duration.

During World War II and into the Cold War, until the invention of synthetic painkillers, a supply of processed morphine and opium was kept in the Depository as a hedge against the United States being cut off from the sources of supply of raw opium.

Construction and security

Below the fortress-like structure lies the gold vault lined with granite walls and protected by a blast-proof door weighing 22 tons. No single person is entrusted with the entire combination to the vault. Several members of the Depository staff must dial separate combinations known only to them. Beyond the main vault door, smaller compartments provide further protection. According to a Mosler Safe Company brochure:

"The most famous, if not the largest, vault door order came from the Federal government in 1935 for the newly-constructed gold depository at Fort Knox, Kentucky. Both the vault door and emergency door were 21-inches thick and made of the latest torch- and drill-resistant material. The main vault door weighed 20 tons and the vault casing was 25-inches thick."

The facility is ringed with fences and is guarded by the United States Mint Police. The Depository premises are within the site of Fort Knox, a United States Army post, allowing the Army to provide additional protection. The Depository is protected by layers of physical security, alarms, video cameras, armed guards, and the Army units based at Fort Knox, including Apache helicopter gunships of 8/229 Aviation based at Godman Army Airfield, the 16th Cavalry Regiment, the 19th Engineer Battlion, training battalions of the United States Army Armor School, and the 3rd Brigade Combat Team of the 1st Infantry Division, totaling 30,000 soldiers, with associated tanks, armored personnel carriers, attack helicopters, and artillery.

There is an escape tunnel from the lower level of the vault to be used by someone accidentally locked in.

Since the opening of the depository, the Federal government has disclosed very little information about the security systems and technologies used. What is generally known about the security systems at the Gold Depository mostly dates from the late 1930s. For example, the small turret-like structures at the corners of the building are firing positions for guards with Thompson submachine guns, the standard longarm of the Mint Police when the Depository was built. It is rumored that everything from minefields, to ground-sweeping radars, to body capacitance wires, to automated machine guns triggered by interrupting laser beams are emplaced to guard the building and its approaches. It is rumored that, like the French national bank in Paris, the vaults can be filled with water. The Federal government will neither confirm nor deny the rumors. Employees are sworn to secrecy and cannot divulge information about the vault's security.

For security reasons, no visitors are allowed inside the depository grounds. This policy has been enforced ever since the vault opened and the only exception was an inspection by members of the United States Congress on September 23, 1974.

Gold and coin holdings

Gold holdings peaked during World War II at 20,205 metric tons (649.6 million oz. troy). Holdings are 4,578 metric tons (147.2 million oz. troy ) in 368,000 standard, 400 oz. troy (12.4 kg or 27.4 lb avoirdupois) gold bars. At March 15, 2011 rates of $1400 an ounce it is worth $206.1 billion, while the World War II total of 649.6 million oz. troy would be worth $909 billion. The depository also holds monetary gold coins. The 1933 Double Eagle was also a temporary resident after transfer from 7 World Trade Center in July 2001, until its sale in July 2002 for $7.59 million. Sometime in 2004, 10 additional allegedly stolen 1933 Double Eagles were transported to Fort Knox for safekeeping.

Not all the gold bars held in the depository are of exactly the same composition. The mint gold bars are nearly pure gold. Bars made from melted gold coins, however, called "coin bars", are the same composition as the original coins, which is only 90% gold. Unlike many .999 fine gold bullion coins minted in modern times for holding-purposes today, the coin alloy for pre-1933 U.S. coins, which were intended for circulation, was a much tougher and wear-resistant .900 fine alloy (balance copper) used for all U.S. gold coins since 1837. (See crown gold for further gold coin alloy history).

All of the gold in the depository, if pure, could form a cube 19.7 feet (6 m) on a side—a volume of 216 m³. In comparison, all the gold ever refined in history (an estimated 165,000 tonnes) is about 40 times greater, so the facility alone holds about 2.5% of all gold ever refined.

The United States holds more gold bullion than any other country, with about 2.39 times that of the next leading country, Germany.

In popular culture

The bullion depository has become a symbol of an impregnable vault, leading to phrases such as "locked up tighter than Fort Knox" or "safer than Fort Knox". Many businesses in the surrounding areas are references to the bullion depository.

The Meade County Bank in Muldraugh, KY resembles the bullion depository's exterior design.

Cinema

• The 1937 RKO Lee Tracy film Behind the Headlines climaxes in a plan to steal gold bars en route from Washington, D.C. to Fort Knox.
• The 1951 Bud Abbott & Lou Costello film Comin' Round the Mountain has the two using a treasure map to find a stash of gold. When they finally reach the gold at the end of the film, they find themselves in the middle of Fort Knox and are immediately arrested.
• The 1951 Warner Bros. short 14 Carrot Rabbit featuring Bugs Bunny and Yosemite Sam follows a similar routine, with Sam being led away by guards at the end. Bugs is also under suspicion, but slips away on a large boat.
• The popular 1959 Ian Fleming-written James Bond novel Goldfinger, and the 1964 movie of the same name, are about a criminal plot called "Operation Grand Slam" to break in to the U.S. Bullion Depository. In the book, Auric Goldfinger's plan is to steal the gold. In the movie, it is to render the gold contained in the Depository radioactive and useless with a nuclear device, crippling the economy and driving up the price of the gold Goldfinger already has. The movie was set before the U.S. dollar ceased to be backed by gold in 1971.
• The facility is referenced in the 1995 film Die Hard with a Vengeance as "for tourists" compared to the target of the film—the Federal Reserve Bank of New York, which they claim holds "ten times what's in Kentucky".
• In the 2000 film Battlefield Earth, a group of humans, enslaved by an alien race called the Psychlos, trick them into thinking they're "mining" for gold by breaking into the Bullion Depository and delivering them the gold that's stored there. Interestingly, the Depository's vast supply of gold had sat completely undisturbed after centuries of living under alien rule.

Television

• In Season 3, Episode 13 ("The Two Bartlets") of the American television show The West Wing, a meeting takes place between a senior white house staff member and a UFO conspiracy theorist. The meeting was called in order to secure an audit of the Bullion Depository, as the theorist alleged that it was being used to store wreckage of an alien spacecraft rather than gold.

• In Season 1, Episode 1 ("Wanted: The Super Friends") of the American Cartoon show Challenge of the Super Friends, Superman falls under hypnosis by the Legion of Doom's Dream Machine and unknowing breaks in and robs the Depository. He later claims he dreamed of the robbery until his friends reveal that the robbery actually happened.

• In an early episode of Pinky and the Brain (then part of the animated television series Animaniacs) titled "Opportunity Knox", Pinky and the Brain attempt to take over the world by breaking into Fort Knox and seizing its gold reserves. They manage to get into the vault by subduing the guards with a strong allergenic pollen. However, their plan is ultimately foiled when they attempt to lift a single gold bar and get crushed under its weight.

See also

• Federal Reserve System
• Federal Reserve Bank of New York
• List of attractions and events in Louisville, Kentucky
• Gold reserve
• Nixon Shock—U.S. President Richard Nixon took the United States off the gold standard, stopping the direct convertibility of United States dollars to gold.

External links

Media related to United States Bullion Depository at Wikimedia Commons

• Satellite photo of the Fort Knox Bullion Depository, click to enlarge
• An article about the Bullion Depository